MARCH 19, 2018 – GOOD NEWS ABOUNDS; RATES ON THE RISE THIS WEEK
The FOMC meets this week, expectations are rates will move up by 25 basis points. Nothing has happened in the last weeks that would derail these plans. In fact, the economy seems to be picking up on all fronts.
Last week, filings for unemployment benefits fell for the third time in four weeks, and hover near the lowest level seen in 48 years. Home prices surged 8.8 percent in February, which is the biggest monthly gain in four years. Existing housing inventory is thin, and it was the 72nd straight month of year-over-year prices increases. Consumer sentiment rose in March to a 14-year high as the new tax cuts boosted disposable income. Industrial production in February rebounded signaling economic momentum is picking up; it is running at the fastest pace since the first quarter of 2011.
With an imminent rate hike this week and further increases expected later this year, the opportunity to lock in favorable rates remains available to you now. We still recommend interest rate swaps in the present interest rate environment.